exv4w8








EXHIBIT 4.8



THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.




WARRANT TO PURCHASE STOCK




	 	 	 
	Corporation:

	 	ZONARE MEDICAL SYSTEMS, INC., a Delaware Corporation
	Number of Shares:

	 	96,501 
	Class of Stock:

	 	Series F Preferred
	Initial Exercise Price:

	 	$0.829 per share
	Issue Date:

	 	December 22, 2005
	Expiration Date:

	 	The earlier of (i) seven (7) years after the Issue Date or (ii)
three (3) years after the closing of the Company’s initial public
offering of its Common Stock effected pursuant to a Registration
Statement on Form S-l (or its successor) filed under the
Securities Act of 1933, as amended (the “Act”).






     THIS WARRANT CERTIFIES THAT, for good and valuable consideration, the receipt of which is
hereby acknowledged, COMERICA BANK or its assignee (“Holder”) is entitled to purchase the number of
fully paid and nonassessable shares of the class of securities (the “Shares”) of the corporation
(the “Company”) at the initial exercise price per Share (the “Warrant Price”) all as set forth
above and as adjusted pursuant to Article 2 of this warrant, subject to the provisions and upon the
terms and conditions set forth in this warrant.


ARTICLE 1: EXERCISE.




     1.1 Method of Exercise. Holder may exercise this warrant by delivering this warrant and a duly
executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal
office of the Company.
Holder shall also deliver to the Company a check for the aggregate Warrant Price for the
Shares being purchased.



     1.2 Intentionally Omitted.



     1.3 Intentionally Omitted.



     1.4 Fair Market Value. If the Shares are traded regularly in a public market, the fair market value of
the Shares shall be the closing price of the Shares (or the closing price of the Company’s
stock into which the Shares
are convertible) reported for the business day immediately before Holder delivers its Notice
of Exercise to the
Company. If the Shares are not regularly traded in a public market, the Board of Directors of
the Company shall
determine fair market value in its reasonable good faith judgment.



     1.5 Delivery of Certificate and New Warrant. Promptly after Holder exercises this warrant, the
Company shall deliver to Holder certificates for the Shares acquired and, if this warrant has
not been fully exercised
and has not expired, a new warrant representing the Shares not so acquired.



     1.6 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this warrant and, in the case of loss, theft or
destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case
of mutilation, on
surrender and cancellation of this warrant, the Company at its expense shall execute and
deliver, in lieu of this
warrant, a new warrant of like tenor.



     1.7 Repurchase on Sale, Merger, or Consolidation of the Company.



          1.7.1 “Acquisition.” For the purpose of this warrant, “Acquisition” means (a) any
sale, license, or other disposition of all or substantially all of the assets (including
intellectual property) of the Company, or (b)




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any reorganization, consolidation, merger or sale of the voting securities of the Company or any
other transaction where the holders of the Company’s securities before the transaction
beneficially own less than 50% of the outstanding voting securities of the surviving entity after
the transaction.




          1.7.2 Assumption of Warrant. If upon the closing of any Acquisition the successor
entity assumes the obligations of this warrant, then this warrant shall be exercisable for the
same securities, cash, and property as would be payable for the Shares issuable upon exercise of
the unexercised portion of this warrant as if such Shares were outstanding on the record date for
the Acquisition and subsequent closing. The Warrant Price shall be adjusted accordingly. The
Company shall use reasonable efforts to cause the surviving corporation to
assume the obligations of this warrant.




          1.7.3 Nonassumption. If upon the closing of any Acquisition the successor entity
does not assume the obligations of this warrant and Holder has not otherwise exercised this
warrant in full, then Holder shall have the option to require the Company to purchase this
warrant for cash upon the closing of the Acquisition for an amount per Share equal to three (3)
times the Warrant Price.




ARTICLE 2: ADJUSTMENTS TO THE SHARES.



     2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on its common
stock payable in common stock, or other securities, or subdivides the outstanding common stock
into a greater amount of common stock, then upon exercise of this warrant, for each Share
acquired, Holder shall receive, without cost to Holder, the total number and kind of securities
to which Holder would have been entitled had Holder owned the Shares of record as of the date the
dividend or subdivision occurred.



     2.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange,
substitution, or other event that results in a change of the number and/or class of the
securities issuable upon exercise or conversion of this warrant, Holder shall be entitled to
receive, upon exercise or conversion of this warrant, the number and kind of securities and
property that Holder would have received for the Shares if this warrant had been exercised
immediately before such reclassification, exchange, substitution, or other event. Such an event
shall include any automatic conversion of the outstanding or issuable securities of the Company
of the same class or series as the Shares to common stock pursuant to the terms of the Company’s
Amended and Restated Certificate of Incorporation upon the closing of a registered public
offering of the Company’s common stock. The Company or its successor shall promptly issue to
Holder a new warrant for such new securities or other property. The new warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided
for in
this Article 2 including, without limitation, adjustments to the Warrant Price and to
the number of securities or property issuable upon exercise of the new warrant. The
provisions of this Section 2.2 shall similarly apply to successive reclassifications,
exchanges, substitutions, or other events.



     2.3 Adjustments for Combinations, Etc. If the outstanding Shares are combined or
consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price
shall be proportionately increased. If the outstanding Shares are combined or consolidated, by
reclassification or otherwise, into a greater number of shares, the Warrant Price shall be
proportionately decreased.



     2.4 Adjustments for Diluting Issuances. The Warrant Price and the number of Shares
issuable upon exercise of this warrant shall be subject to adjustment, from time to time, in the
manner set forth on Exhibit A, if attached, in the event of Diluting Issuances (as defined on
Exhibit A).



     2.5 No Impairment. The Company shall not, by amendment of its Amended and Restated
Certificate of Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or performed under this
warrant by the Company, but shall at all times in good faith assist in carrying out all the
provisions of this Article 2 and in taking all such action as may be necessary or appropriate to
protect Holder’s rights under this Article against impairment. Notwithstanding the foregoing, the
Company may amend or modify its Amended and Restated Certificate of Incorporation or take any
other action (including any of the transactions described in this Article 2) at any time and for
any reason so long as such amendment, modification or action affects Holder in the same manner as
such amendment, modification or action affects all of the Company’s



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stockholders holding the same series or class of shares that would be issued to the Holder upon
proper exercise of this Warrant as of the date of such amendment, modification or action.




     2.6 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the
Company at its expense shall promptly compute such adjustment, and furnish Holder with a
certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which
such adjustment is based. The Company shall, upon written request, furnish Holder a certificate
setting forth the Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.



     2.7 Fractional Shares. No fractional Shares shall be issuable upon exercise or
conversion of the Warrant and the Number of Shares to be issued shall be rounded down to the
nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the
Warrant, the Company shall eliminate such fractional share interest by paying Holder amount
computed by multiplying the fractional interest by the fair market value of a full Share.



ARTICLE 3: REPRESENTATIONS AND COVENANTS OF THE COMPANY.




     3.1 Representations and Warranties. The Company hereby represents and warrants to the
Holder as follows:



          (a) The initial Warrant Price referenced on the first page of this warrant is not greater than
the last price at which Company has sold its Series F Preferred Stock.




          (b) All Shares which may be issued upon the exercise of the purchase right represented by
this warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or under applicable
federal and state securities laws, or any liens and encumbrances imposed by Holder.




          (c) The Company’s capitalization table attached to this warrant is true and complete as of the
Issue Date.




     3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare any
dividend or distribution upon its common stock, whether in cash, property, stock, or other
securities and whether or not a regular cash dividend; (b) to offer for subscription pro rata to
the holders of any class or series of its stock any additional shares of stock of any class or
series or other rights; (c) to effect any reclassification or recapitalization of common stock; or
(d) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey
all or substantially all of its assets, or to liquidate, dissolve or wind up, then, in connection
with each such event, the Company shall give Holder (1) at least 20 days prior written notice of
the date on which a record will be taken for such dividend, distribution, or subscription rights
(and specifying the date on which the holders of common stock will be entitled thereto) or for
determining rights to vote, if any, in respect of the matters referred to in (a) and (b) above; and
(2) in the case of the matters referred to in (c) and (d) above at least 20 days prior written
notice of the date when the same will take place (and specifying the date on which the holders of
common stock will be entitled to exchange their common stock for securities or other property
deliverable upon the occurrence of such event).



     3.3 Information Rights. So long as the Holder holds this warrant and/or any of the
Shares, the Company shall deliver to the Holder, promptly after mailing, copies of all communiques
to the shareholders of the Company.



ARTICLE 4: MISCELLANEOUS.




     4.1 Term: Exercise Upon Expiration. This warrant is exercisable in whole or in part,
at any time and
from time to time on or before the Expiration Date set forth above.



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     4.2
Legends. This warrant and the Shares (and the securities issuable, directly
or indirectly, upon
conversion of the Shares, if any) shall be imprinted with a legend in substantially the
following form:



          THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND
ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.




     4.3 Compliance with Securities Laws on Transfer. This warrant and the Shares issuable
upon exercise of this warrant (and the securities issuable, directly or indirectly, upon
conversion of the Shares, if any) may not be transferred or assigned in whole or in part without
compliance with applicable federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation letters and legal
opinions reasonably satisfactory to the Company). The Company shall not require Holder to provide
an opinion of counsel if the transfer is to an affiliate of Holder or if there is no material
question as to the availability of current information as referenced in Rule 144(c), Holder
represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker
represents that it has complied with Rule 144(f), and the Company is provided with a copy of
Holder’s notice of proposed sale.



     4.4 Transfer Procedure. Subject to the provisions of Section 4.3, Holder may transfer
all or part of this warrant or the Shares issuable upon exercise of this warrant (or the
securities issuable, directly or indirectly, upon conversion of the Shares, if any) by giving the
Company notice of the portion of the warrant being transferred setting forth the name, address and
taxpayer identification number of the transferee and surrendering this warrant to the Company for
reissuance to the transferee(s) (and Holder, if applicable); provided, however, that Holder may
transfer all or part of this warrant to its affiliates, including, without limitation, Comerica
Incorporated, at any time without notice to the Company, and such affiliate shall then be entitled
to all the rights of Holder under this warrant and any related agreements, and the Company shall
cooperate fully in ensuring that any stock issued upon exercise of this warrant is issued in the
name of the affiliate that exercises the warrant. The terms and conditions of this warrant shall
inure to the benefit of, and be binding upon, the Company and the holders hereof and their
respective permitted successors and assigns. Unless the Company is filing financial information
with the SEC pursuant to the Securities Exchange Act of 1934, the Company shall have the right to
refuse to transfer any portion of this warrant to any person who directly competes with the
Company.



     4.5 Notices. All notices and other communications from the Company to the Holder, or
vice versa, shall be deemed delivered and effective when given personally or mailed by first-class
registered or certified mail, postage prepaid, at such address as may have been furnished to the
Company or the Holder, as the case may be, in writing by the Company or such Holder from time to
time. All notices to the Holder shall be addressed as follows:


Comerica Bank

Attn: Warrant Administrator

500 Woodward Avenue, 32nd Floor, MC 3379

Detroit, MI 48226




     4.6 Amendments. This warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought.



     4.7 Attorneys’ Fees. In the event of any dispute between the parties concerning the
terms and provisions of this warrant, the party prevailing in such dispute shall be entitled to
collect from the other party all costs incurred in such dispute, including reasonable attorneys’
fees.



     4.8 Lock-up. Each Holder and transferee hereby agrees that, in connection with the
Company’s IPO, if so requested by any representative of the underwriters (the “Managing
Underwriter”), such Holder or transferee shall not sell or otherwise transfer any securities of
the Company during the period specified by the Company’s Board of Directors at the request of the
Managing Underwriter (the “Market Standoff Period”), with such period not to exceed 180 days
following the effective date of the IPO; provided, that all of the Company’s officers and



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directors, and all holders of 1% or more of the equity or voting power of the Company, enter into
similar agreements. The Company may impose stop-transfer instructions with respect to securities
subject to the foregoing restrictions until the end of such Market Standoff Period.




     4.9 Accredited Investor Status. The Holder represents to the Company that it is an
“accredited investor” within the meaning of Regulation D promulgated under the Act.



     4.10 Governing Law. This warrant shall be governed by and construed in accordance with
the laws of the State of California, without giving effect to its principles regarding conflicts of
law.



     4.11 Series E Warrant. The Company and the Holder agreed that the Warrant to purchase
81,204 shares of Series E Preferred Stock (the “Series E Warrant”) issued to the Holder on
September 20,2004 shall be canceled upon delivery of this Warrant to Holder. The Holder represents
to the Company that it has not transferred the Series E Warrant to any person or entity prior to
cancellation of such Series E Warrant.



	 	 	 	 	 	 	 
	 	 	ZONARE MEDICAL SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Kevin Davidge
 

Kevin Davidge
	 	 
	 

	 	Title:
	 	V. P. & CFO	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 




Authorized signatories under Corporate Resolutions to Borrow or an authorized signer(s) under a
resolution covering warrants must sign the warrant.




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APPENDIX I




NOTICE OF EXERCISE




     1. The undersigned hereby elects to purchase                      shares of the                      stock
of ZONARE MEDICAL SYSTEMS, INC. pursuant to the terms of the attached warrant, and tenders herewith
payment of the purchase price of such shares in full.



     2. Please issue a certificate or certificates representing said shares in the name of the
undersigned or
in such other name as is specified below:


Comerica Bank

Attn: Warrant Administrator

500 Woodward Avenue, 32nd Floor, MC 3379

Detroit, MI 48226




     3. The undersigned represents it is acquiring the shares solely for its own account and not as
a
nominee for any other party and not with a view toward the resale or distribution thereof
except in compliance with
applicable securities laws.


COMERICA BANK or Registered Assignee




	 	 	 
	 

(Signature)

	 	 
	 
	 

(Date)

	 	 






 









 






EXHIBIT A 




Anti-Dilution Provisions




     In the event of the issuance (a “Diluting Issuance”) by the Company, after the Issue Date of
the warrant, of securities at a price per share less than the Warrant Price, then the number of
shares of common stock issuable upon conversion of the Shares shall be adjusted in accordance with
those provisions (the “Provisions”) of the Company’s Amended and Restated Certificate of
Incorporation which apply to Diluting Issuances.



     Under no circumstances shall the aggregate Warrant Price payable by the Holder upon
exercise of the warrant increase as a result of any adjustment arising from a Diluting
Issuance.